Exhibit 4.4


 


EXECUTION COPY


 


NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144
OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.


 


TOUGHBUILT INDUSTRIES, INC.


 


Warrant
To Purchase Common Stock


 


Warrant No.: ___


Date of Issuance: _________ __, 2016 (“Issuance
Date”)


 


TOUGHBUILT INDUSTRIES,
INC., a Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, __________, the registered holder
hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase
from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock
(including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined
below), __________ (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined
below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant
shall have the meanings set forth in Section 16. This Warrant is one of the Warrants to Purchase Common Stock (the “Warrants”)
issued pursuant to that certain Subscription Agreement, dated as of _________ __, 2016 (as may be amended from time to time, the
“Subscription Agreement”) pursuant to which the Company has offered and sold to the signatories thereto units
(the “Units”) of the Company’s securities consisting of Class B Convertible Preferred Stock, par value
$0.0001 per share (the “Class B Preferred Stock”), and Warrants.


 




     


     


    

  


1.          EXERCISE
OF WARRANT.


 


(a)          Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section
1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date, in whole or in part, by delivery (whether
via e-mail, facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise
Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Business Day following an exercise
of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect
on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the “Aggregate
Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify the Company
in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall
not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an
Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original
of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution
and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of
the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first
(1st) Business Day following the date on which the Company has received an Exercise Notice, the Company shall transmit
by e-mail or facsimile an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit
B, to the Company’s transfer agent (the “Transfer Agent”). On or before the third (3rd)
Business Day following the date on which the Company has received an Exercise Notice from the Holder, the Company shall (X) provided
that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is
entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
issue and deliver to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent
or designee, in each case, sent by reputable overnight courier to the address as specified in the applicable Exercise Notice,
a certificate, registered in the Company’s share register in the name of the Holder or its designee (as indicated in the
applicable Exercise Notice), for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise.
Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are
credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the
case may be). If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant
Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an
exercise, then, at the request of the Holder, the Company shall as soon as practicable and in no event later than three (3) Business
Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares of
Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued
shall be rounded up to the nearest whole number. The Company shall pay any and all taxes and fees which may be payable with respect
to the issuance and delivery of Warrant Shares upon exercise of this Warrant.


 









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(b)          Exercise
Price. For purposes of this Warrant, “Exercise Price” means $6.00, subject to adjustment as provided herein.


 


(c)          Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, to issue to the Holder within
three (3) Business Days after receipt of the applicable Exercise Notice, a certificate for the number of shares of Common Stock
to which the Holder is entitled and register such shares of Common Stock on the Company’s share register or to credit the
Holder’s balance account with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise of this Warrant (as the case may be), then, in addition to all other remedies available to the Holder, the Company shall
pay in cash to the Holder on each day after such third (3rd) Business Day that the issuance of such shares of Common
Stock is not timely effected, (A) if the Common Stock is not then listed or quoted on an Eligible Market, an amount equal to $10.00
per Business Day (increasing to $25.00 per Business Day on the third Business Day and increasing to $50.00 per Business Day on
the sixth Business Day after such damages begin to accrue) for each Business Day after the last possible date on which the Company
could have issued such shares of Common Stock to the Holder without violating Section 1(a) until such shares of Common Stock are
delivered or the Holder rescinds such exercise, and (B) if the Common Stock is then listed or quoted on an Eligible Market, 2.0%
of the product of (1) the aggregate number of shares of Common Stock not issued to the Holder on a timely basis and to which the
Holder is entitled and (2) the Closing Sale Price of the Common Stock on the Trading Day immediately preceding the last possible
date on which the Company could have issued such shares of Common Stock to the Holder without violating Section 1(a). In addition
to the foregoing, if within three (3) Business Days after the Company’s receipt of the applicable Exercise Notice, the Company
shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock on the Company’s share
register or credit the Holder’s balance account with DTC for the number of shares of Common Stock to which the Holder is
entitled upon the Holder’s exercise hereunder (as the case may be), and if on or after such third (3rd) Business
Day the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open market transaction or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, issuable
upon such exercise that the Holder so anticipated receiving from the Company, then, in addition to all other remedies available
to the Holder, the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion,
either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions
and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other
Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation
to so issue and deliver such certificate or credit the Holder’s balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such shares
of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate or
certificates representing such shares of Common Stock or credit the Holder’s balance account with DTC for the number of
shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares
of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Business Day during the period commencing
on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii).


 




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(d)          Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the time of exercise
hereof a registration statement registering the resale by the Holder of all of the Warrant Shares under the Securities Act of
1933, as amended (the “Securities Act”), is not effective (or the prospectus contained therein is not available
for use), then the Holder may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash
payment otherwise contemplated to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect
instead to receive upon such exercise the “Net Number” of shares of Common Stock determined according to the following
formula (a “Cashless Exercise”):


 


Net Number = (A
x B) - (A x C)


 


B


 


For purposes of the
foregoing formula:


 


A= the total number of shares with
respect to which this Warrant is then being exercised.


 


B= the VWAP of the Common Stock
(as reported by Bloomberg) on the date immediately preceding the date of the Notice of Exercise.


 


C= the
Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.


 


(e)          Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant
Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares
that are not disputed and resolve such dispute in accordance with Section 13.


 




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(f)          Limitations
on Exercises. Notwithstanding anything to the contrary contained in this Warrant, from and after such date (the “Registration
Date”) that shares of the Company’s Common Stock are registered under Section 12 of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), this Warrant shall not be exercisable by the Holder hereof to the
extent (but only to the extent) that the Holder or any of its affiliates would beneficially own in excess of 4.99% (the “Maximum
Percentage”) of the Common Stock outstanding immediately after giving effect to such issuance. To the extent the
above limitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis other convertible, exercisable
or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities shall be exercisable (as
among all such securities owned by the Holder) shall, subject to such Maximum Percentage limitation, be determined on the basis
of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior inability to exercise
this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with
respect to any subsequent determination of exercisability. For the purposes of this paragraph, beneficial ownership and all determinations
and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. The provisions of this paragraph shall
be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any
portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein
contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation.
The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. The holders of Common Stock shall
be third party beneficiaries of this paragraph and the Company may not amend or waive this paragraph without the consent of holders
of a majority of its Common Stock. For any reason at any time, upon the written or oral request of the Holder, the Company shall
within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding,
including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including,
without limitation, pursuant to this Warrant or securities issued pursuant to the Subscription Agreement. By written notice to
the Company, at any time the Holder may increase or decrease the Maximum Percentage to any other percentage not in excess of 9.99%
specified in such notice; provided that (i) any such increase will not be effective until the 61st day after such notice is delivered
to the Company, and (ii) any such increase or decrease will apply only to the Holder sending such notice and not to any other holder
of Warrants.


 


(g)          Insufficient
Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common
Stock equal to not less than 150% of the maximum number of shares of Common Stock issuable upon exercise of this Warrant (without
regard to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable
upon exercise of this Warrant) (the “Required Reserve Amount”). If, notwithstanding the foregoing, and not
in limitation thereof, at any time while any of the Warrants remain outstanding the Company does not have a sufficient number
of authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon exercise of this Warrant
at least a number of shares of Common Stock equal to the Required Reserve Amount (an “Authorized Share Failure”),
then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock
to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the Warrants then outstanding. Without
limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share
Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold
a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit
its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors to
recommend to the stockholders that they approve such proposal.


 




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2.          ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise
of this Warrant are subject to adjustment from time to time as set forth in this Section 2.


 


(a)          Stock
Dividends and Splits. Without limiting any provision of Section 2(b) or Section 4, if the Company, at any time on or after the
date of the Subscription Agreement, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common
Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common
Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes
of its then outstanding shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before
such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or
(iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any
event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then
the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.


 


(b)          Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the date on which no shares of Class B Preferred Stock
shall remain outstanding, the Company issues or sells, or in accordance with this Section 2(b) is deemed to have issued or sold,
any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the
Company, but excluding any Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration per share
(the “New Issuance Price”) less than a price equal to the Exercise Price in effect immediately prior to such
issue or sale or deemed issuance or sale (such Exercise Price then in effect is referred to as the “Applicable Price”)
(the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then
in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without
limitation, determining the adjusted Exercise Price and consideration per share under this Section 2(b)), the following shall be
applicable:


 




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(i)          Issuance
of Options. If the Company in any manner grants or sells any Options and the lowest price per share for which one share of
Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of the grant or sale of such Option for such price per
share. For purposes of this Section 2(b)(i), the “lowest price per share for which one share of Common Stock is issuable upon
the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise
of any such Option” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received
or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option and
(y) the lowest exercise price set forth in such Option for which one share of Common Stock is issuable upon the exercise of any
such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option minus
(2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting or sale of such
Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such
Option (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the
actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the
actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.


 


(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 2(b)(ii), the
“lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security and (y) the lowest conversion price set forth in such Convertible Security for which one
share of Common Stock is issuable upon conversion, exercise or exchange thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred on, the holder of such Convertible Security (or
any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale
of such Convertible Securities is made upon exercise of any Options for which adjustment of this Warrant has been or is to be made
pursuant to other provisions of this Section 2(b), except as contemplated below, no further adjustment of the Exercise Price shall
be made by reason of such issue or sale.


 




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(iii)        Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For
purposes of this Section 2(b)(iii), if the terms of any Option or Convertible Security that was outstanding as of the date of issuance
of this Warrant are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible
Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been
issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(b) shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.


 


(iv)        Calculation
of Consideration Received. If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to
have been issued or sold for cash, the consideration received therefor will be deemed to be the net amount of consideration received
by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except
where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company
for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Business Days immediately
preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the
non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor
will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable
to such shares of Common Stock, Options or Convertible Securities, as the case may be. The fair value of any consideration other
than cash or publicly traded securities will be determined jointly by the Company and the Holder. If such parties are unable to
reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Business Days after the tenth (10th) day following
such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of
such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall
be borne by the Company.


 


(v)         Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may
be).


 




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(c)          Adjustment
of Exercise Price Upon Adjustment of Class B Preferred Stock. If and whenever on or after the date hereof and so long as any
shares of Class B Preferred Stock shall remain outstanding, the Company issues or sells, or is deemed to have issued or sold, any
shares of Common Stock, Options or Convertible Securities resulting in an adjustment in the Conversion Price (as defined in the
Class B Certificate of Designations) or Conversion Rate (as defined in the Class B Certificate of Designations) for the Class B
Preferred Stock pursuant to Section 6 of the Class B Certificate of Designations (each, a “Class B Preferred Dilutive
Event”), then, in each case, immediately after such Class B Preferred Dilutive Event and automatically, without any further
action by the Company or the Holder of this Warrant, the Exercise Price of this Warrant shall be reduced to a price per share that
shall be equal to the product of (I) the Conversion Price of the Class B Preferred Shares, as so adjusted, multiplied by (II) 1.20.
For the purposes of clarity, the provisions of this Section 2(c) shall apply in lieu of Section 2(b) for so long as any shares
of Class B Preferred Stock shall remain outstanding, and the provisions of Section 2(b) shall apply in lieu of this Section 2(c)
from and after the date on which no shares of Class B Preferred Stock shall remain outstanding. 


 


(d)          Other
Events. In the event that the Company or any Subsidiary shall take any action to
which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution
or if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions
(including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features),
then the Company’s board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise
Price and the number of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment
pursuant to this Section 2(d) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined
pursuant to this Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting its
interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good faith,
upon an independent investment bank to make such appropriate adjustments, whose determination shall be final and binding and whose
fees and expenses shall be borne fifty percent (50%) by the Holder and fifty percent (50%) by the Company.



 


(e)          Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest one-hundred thousandth of a cent or the nearest
1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue
or sale of Common Stock.


 




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3.          RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall declare or make
any dividend or other distribution of its assets (or rights to acquire its assets) to all or substantially all of the holders of
shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock
or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement
or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each
such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date
on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s
right to participate in any such Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder shall
not be entitled to participate in such Distribution to such extent (or the beneficial ownership of any such shares of Common Stock
as a result of such Distribution to such extent) and such Distribution to such extent shall be held in abeyance for the benefit
of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).


 


4.          PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.


 


(a)          Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time
the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other
property pro rata to all or substantially all of the record holders of any class of shares of Common Stock (the “Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum
Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or,
if no such record is taken, the date as of which such record holders of shares of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such
Purchase Right would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right
to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its
right thereto would not result in the Holder exceeding the Maximum Percentage).


 




    	 	10	 



     


    

  


(b)          Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction
unless (i)  the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other
Transaction Documents (as defined in the Subscription Agreement) in accordance with the provisions of this Section 4(b) pursuant
to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction,
including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written
instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for
a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise
of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and
with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital
stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction) and (ii) the Successor
Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed for trading on
an Eligible Market. Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted
for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and
power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction,
the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any
time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities,
cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly
traded common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been
entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior
to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in
accordance with the provisions of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to
the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities
or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to insure that the Holder will thereafter have the right to receive upon an exercise of this
Warrant at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu
of the shares of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under
Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to
such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including warrants
or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable
Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard
to any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in form and substance
reasonably satisfactory to the Holder.


 


(c)          Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage,
applied however with respect to shares of capital stock registered under the Exchange Act and thereafter receivable upon exercise
of this Warrant (or any such other warrant)).


 




    	 	11	 



     


    

  


5.          NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its articles of incorporation or bylaws or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will
at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights
of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all
such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable
shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as any of the Warrants are outstanding, take
all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose
of effecting the exercise of the Warrants, 150% of the maximum number of shares of Common Stock as shall from time to time be necessary
to effect the exercise of the Warrants then outstanding (without regard to any limitations on exercise).


 


6.          WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as
the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to
any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the
Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors
of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other
information given to the stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.


 


7.          REISSUANCE
OF WARRANTS.


 


(a)          Transfer
of Warrant. Subject to Section 15, if this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company,
whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section
7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by
the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant
(in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.


 




    	 	12	 



     


    

  


(b)          Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification
and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of
any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation,
upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.


 


(c)          Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof
by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing
in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will
represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender;
provided, however, no warrants for fractional shares of Common Stock shall be given.


 


(d)          Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.


 


8.          NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in the
manner and to the addresses set forth in the Subscription Agreement. The Company shall provide the Holder with prompt written notice
of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor.
Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each
adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation
of such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or
sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to all or substantially
all of the holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder and (iii) at least ten (10) Business Days prior to the consummation of any Fundamental
Transaction. From and after the Registration Date, to the extent that any notice provided hereunder constitutes, or contains, material,
non-public information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with
the Commission (as defined in the Subscription Agreement) pursuant to a Current Report on Form 8-K.


 




    	 	13	 



     


    

  


9.          AMENDMENT
AND WAIVER. Except as otherwise expressly set forth herein, the provisions of this Warrant (other than Section 1(f)) may be amended
and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if
the Company has obtained the written consent of the Holder. The Holder shall be entitled, at its option, to the benefit of any
amendment of (i) any other similar warrant issued under the Subscription Agreement or (ii) any other similar warrant. Except as
otherwise expressly set forth herein, no waiver shall be effective unless it is in writing and signed by an authorized representative
of the waiving party.


 


10.         SEVERABILITY.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 


11.         GOVERNING
LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, County of New York, for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall (i) be deemed or operate to preclude the Holder
from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s
obligations to the Holder or to enforce a judgment or other court ruling in favor of the Holder or (ii) limit, or be deemed to
limit, any provision of Section 13. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION
CONTEMPLATED HEREBY.


 




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12.         CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant.


 


13.         DISPUTE
RESOLUTION. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the Warrant
Shares, the Company shall submit the disputed determinations or arithmetic calculations via email or facsimile within two (2) Business
Days of receipt of the Exercise Notice giving rise to such dispute, as the case may be, to the Holder. If the Holder and the Company
are unable to agree upon such determination or calculation of the Exercise Price or the Warrant Shares within five (5) Business
Days of such disputed determination or arithmetic calculation being submitted to the Holder, then the Company shall, within two
(2) Business Days submit via email or facsimile (a) the disputed determination of the Exercise Price to an independent, reputable
investment bank selected by the Company and approved by the Holder or (b) the disputed arithmetic calculation of the Warrant Shares
to the Company’s independent, outside accountant. The Company shall cause the investment bank or the accountant, as the case
may be, to perform the determinations or calculations and notify the Company and the Holder of the results no later than ten (10)
Business Days from the time it receives the disputed determinations or calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all parties absent demonstrable error. The expenses of
the investment bank and accountant will be borne by the Company unless the investment bank or accountant determines that the determination
of the Exercise Price or the arithmetic calculation of the Warrant Shares by the Holder was incorrect, in which case the expenses
of the investment bank and accountant will be borne by the Holder.


 


14.         REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative
and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue
damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there
shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided
for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to be received by
the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and
that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach
or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. The
Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm
the Company’s compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section
2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be
made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the Company
shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than the Holder or its agent on its behalf.


 




    	 	15	 



     


    

  


15.         RESTRICTIONS
ON TRANSFER; LEGENDS.


 


(a)          Registration
or Exemption Required. Assuming the accuracy of the representations and warranties of the Holder
contained in the Subscription Agreement, this Warrant has been issued in a transaction exempt from the registration requirements
of the Securities Act by virtue of Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and exempt from
state registration or qualification under applicable state laws. The Holder acknowledges that the Holder has been advised by the
Company that this Warrant and the Warrant Shares issuable upon exercise thereof have not been registered under the Securities
Act. Neither this Warrant nor the Warrant Shares may be pledged, transferred, sold or assigned except pursuant to an effective
registration statement or an exemption to the registration requirements of the Securities Act and applicable state laws. If,
at the time of the surrender of this Warrant in connection with any transfer of this
Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration
statement under the Securities Act and under applicable state securities or
blue sky laws, the Company may require, as a condition of allowing such transfer (i) that the Holder or transferee of this Warrant,
as the case may be, will furnish to the Company such documentation as reasonably requested to enable the Company to obtain an
opinion of counsel (at the Company’s expense) to the effect that such transfer may be made without registration under
the Securities Act and under applicable state securities or blue sky laws, (ii) that
the holder or transferee execute and deliver to the Company an investment letter in form and substance acceptable to the Company
and (iii) that the transferee be an “accredited investor” as defined in Rule 501(a) promulgated under the Securities
Act or a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.


 


(b)          Representation
of Holder. The Holder represents and warrants that the Holder has acquired this Warrant and will acquire the Warrant Shares
for the Holder’s own account for investment and not with a view to the sale or distribution thereof or the granting of any
participation therein, and that the holder has no present intention of distributing or selling to others any of such interest or
granting any participation therein. The Holder acknowledges that the Warrant and Warrant Shares must be held indefinitely unless
a subsequent disposition thereof is registered under the Securities Act or registered or qualified under any applicable state securities
or “blue-sky” laws or is exempt from registration or qualification. The Holder has no need for liquidity in its investment
in the Company, and is able to bear the economic risk of such investment for an indefinite period and to afford a complete loss
thereof. The Holder is an “accredited investor” as such term is defined in Rule 501 (the provisions of which are known
to the Holder) promulgated under the Securities Act.


 


(c)          Restrictive
Legend. The Holder understands that until such time as the Warrant Shares have been registered under the Securities Act, or
otherwise may be sold pursuant to Rule 144 under the Securities Act or an exemption from registration under the Securities Act
without any restriction as to the number of securities as of a particular date that can then be immediately sold, this Warrant
and the Warrant Shares, as applicable, shall bear a restrictive legend in substantially the form set forth on the cover page of
this Warrant (and a stop-transfer order may be placed against transfer of the certificates for such securities).


 




    	 	16	 



     


    

  


(d)          Disposition
of Warrant or Warrant Shares. With respect to any offer, sale or other disposition of this Warrant or any Warrant Shares prior
to registration of such Warrant Shares, the Holder agrees to give written notice to the Company prior thereto, describing briefly
the manner thereof, together with evidence, reasonably satisfactory to the Company (which shall include such representation of
the transferee regarding investment intent as the Company may request), to the effect that such offer, sale or other disposition
may be effected without registration or qualification (under the Securities Act as then in effect or any federal or state securities
law then in effect) of this Warrant or such Warrant Shares and indicating whether or not under the Securities Act certificates
for this Warrant or Warrant Shares to be sold or otherwise disposed of require any restrictive legend as to applicable restrictions
on transferability in order to ensure compliance with such law.  Upon receiving such written notice and reasonably satisfactory
evidence, the Company, as promptly as practicable but no later than seven (7) days after receipt of the written notice, shall notify
the Holder that the Holder may sell or otherwise dispose of this Warrant or Warrant Shares, all in accordance with the terms of
the notice delivered to the Company.  If the Company determines that the evidence is not reasonably satisfactory to the
Company, the Company shall so notify the Holder promptly with details thereof after such determination has been made. Notwithstanding
the foregoing, any Warrant Shares may be offered, sold or otherwise disposed of in accordance with Rule 144 under the Securities
Act and in compliance with the applicable statutory resale restrictions imposed by state securities laws, provided that the Company
shall have been furnished with such information as the Company may reasonably request to provide a reasonable assurance that the
provisions of Rule 144 and the applicable resale restrictions imposed by state securities laws have been satisfied.  Each
certificate representing this Warrant or the Warrant Shares thus transferred shall bear a legend as to the applicable restrictions
on transferability in order to ensure compliance with such laws, unless pursuant to an opinion of counsel for the Holder, such
legend is not required in order to ensure compliance with such laws.  The Company may issue stop transfer instructions
to its transfer agent in connection with such restrictions.


 


(e)          Removal
of Restrictive Legends. The certificates evidencing the Warrant Shares shall not contain any legend restricting the transfer
thereof: (A) while a registration statement covering the sale or resale of the Warrant Shares is effective under the Securities
Act and such legend removal is permitted under applicable securities laws (including compliance with the prospectus delivery requirements
of the Securities Act), or (B) following any sale of such Warrant Shares pursuant to Rule 144, or (C) if such legend is not required
under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff
of the Commission) and the Company shall have received an opinion of counsel to the Holder in form reasonably acceptable to the
Company to such effect (collectively, the “Unrestricted Conditions”); provided that the Company shall bear the
reasonable expense of any legal opinions relating to (I) sales of Warrants or Warrant Shares made in reliance on Rule 144 by any
Purchaser that is not an “affiliate” as defined in Rule 144 made after the first anniversary of the Closing Date or
(II) any private sale or other transfer of this Warrant or the Warrant Shares. The Company shall cause its counsel to issue a legal
opinion to its transfer agent if required by the transfer agent to effect the issuance of the Warrant Shares, as applicable, without
a restrictive legend or removal of the legend hereunder. The Company agrees that at such time as the Unrestricted Conditions are
met, it will, no later than three (3) Business Days following the delivery by the Holder to the Company or the transfer agent of
a certificate representing Warrant Shares, issued with a restrictive legend, deliver or cause to be delivered to such Holder a
certificate (or electronic transfer) representing such Warrant Shares that is free from all restrictive and other legends.


 




    	 	17	 



     


    




 


16.         REGISTRATION
RIGHTS. This Warrant shall be subject to the registration rights set forth in the Subscription Agreement.


 


17.         CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:


 


(a)          “Approved
Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company and existing
prior to the date hereof and disclosed in the Memorandum, pursuant to which shares of Common Stock and standard options to purchase
Common Stock may be issued to any employee, officer, consultant or director for services provided to the Company in their capacity
as such.


 


(b)          “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply,
the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination,
the average of the bid prices of any market makers for such security as reported in the “pink sheets” by OTC Markets
Group Inc. as of such time of determination. If the Bid Price cannot be calculated for a security as of the particular time of
determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall be the fair
market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair
market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such
determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during such period.


 


(c)          
“Bloomberg” means Bloomberg, L.P.


 


(d)          “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.


 


(e)          “Class
B Certificate of Designations” means that certain Certificate of Designations of Preferences, Rights and Limitations
of Class B Convertible Preferred Stock, dated July ___, 2016, a form of which is included as Exhibit D to the Memorandum.


 




    	 	18	 



     


    

  


(f)          “Closing
Sale Price” means, for any security as of any date, the last trade price for such security on the Principal Market, as
reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing
trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if
the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such
security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg,
or if the foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average
of the ask prices of any market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc.
If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale
Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in
accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during such period.


 


(g)          “Common
Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.


 


(h)          “Convertible
Securities” means any stock, note, debenture or other security (other than Options) that is, or may become, at any time
and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles
the holder thereof to acquire, any shares of Common Stock.


 


(i)          “Eligible
Market” means The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, the New York Stock
Exchange, the NYSE MKT, the NYSE Arca, or the OTCQB or OTCQX operated by the OTC Markets Group, Inc. (or any nationally recognized
successor to any of the foregoing).


 


(j)          “Excluded
Securities” shall have the meaning ascribed thereto in the Class B Certificate of Designations.


 


(k)          “Expiration
Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls on a
day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.


 




    	 	19	 



     


    

  


(l)          “Fundamental
Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related
transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation)
any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its
respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares
of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other
Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including
any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (ii) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act and the rules and
regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchage
Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock
of the Company.


 


(m)          “Memorandum”
means the Company’s Confidential Private Placement Memorandum, dated July 11, 2016, as may be amended and/or supplemented,
from time to time, setting forth the terms of the sale of the units under the Subscription Agreement.


 


(n)          “Options”
means any rights, warrants or options to subscribe for, purchase or otherwise acquire any shares of Common Stock or Convertible
Securities.


 


(o)          “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.


 


(p)          “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.


 


(q)          “Principal
Market” means The NASDAQ Capital Market, The NASDAQ Global Market, The NASDAQ Global Select Market, the New York Stock
Exchange, the NYSE MKT, the NYSE Arca, or the OTCQB or OTCQX operated by the OTC Markets Group, Inc. (or any nationally recognized
successor to any of the foregoing), whichever is at the time the principal trading exchange or market for the Common Stock.


 


(r)          “Subsidiary”
or “Subsidiaries” of any Person means (i) any corporation with respect to which more than 50% of the issued and
outstanding voting equity interests of such corporation is at the time directly or indirectly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or more of such Person’s other Subsidiaries, or (ii) any
partnership or limited liability company in which such Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital contribution) of more than 50% or of which any such Person
is a general partner or may exercise the powers of a general partner.


 




    	 	20	 



     


    

  


(s)          “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.


 


(t)          “Trading
Day” means, as applicable, (x) with respect to all price determinations relating to the Common Stock, any day on which
the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading
Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5
hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or
if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the
hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or
(y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York
Stock Exchange (or any successor thereto) is open for trading of securities.


 


(u)          “Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).


 


(v)         “VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on an Eligible Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Eligible Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day
from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted for
trading on an Eligible Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by
OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price
per share of the Common Stock so reported, or (c) in all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company. If the Company and the Holder are unable to agree upon the fair market value of such security,
then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.


 


[signature page follows]


 




    	 	21	 



     


    

  


IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.


 


	 	TOUGHBUILT INDUSTRIES, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 


 




     


     


    

  


EXHIBIT A


 


EXERCISE NOTICE


 


TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS


WARRANT TO PURCHASE COMMON STOCK


 


TOUGHBUILT INDUSTRIES, INC. 


 


The undersigned holder
hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”) of
TOUGHBUILT INDUSTRIES, INC., a Nevada corporation (the “Company”), evidenced by Warrant to Purchase Common Stock
No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.


 


1.          Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:


 


		____________	a “Cash Exercise” with respect to _________________ Warrant Shares; and/or



 


		____________	a “Cashless Exercise” with respect to _______________ Warrant Shares.



 


In the event that the
Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder
hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date
set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.


 


2.          Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares
to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company
in accordance with the terms of the Warrant.


 


3.          Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ Warrant Shares
in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, to the following address:


 


_______________________


_______________________


_______________________


_______________________


 


Date: _______________ __, ______


    




	 
	Name of Registered Holder


 


	By:	 
	 	Name:
	 	Title:


  




     


     


    

 


EXHIBIT B


 


ACKNOWLEDGMENT


 


The Company hereby
acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated _________, 20__, from the Company and acknowledged and agreed to by _______________.


 


	 	TOUGHBUILT INDUSTRIES, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title: